In this paper a conflict game between the two developing countries is constructed. It is assumed that weapons are imported at the fixed world price, pM, and the consequence of the decline of pM is examined, which happened when the former Soviet Union collapsed. In Section 2, specifying the...

We present a model in which an outside bank and a default penalty support the value of fiat money, and experimental evidence that the theoretical predictions about the behavior of such economies, based on the Fisher-condition, work reasonably well in a laboratory setting. The import of this...

In a general equilibrium model of the world economy, we develop a two-dimensional energy balance climate model featuring heat diffusion and anthropogenic forcing driven by global fossil fuel use across the sphere of the Earth. This introduces an endogenous location dependent temperature...

We apply a general equilibrium model to quantify economic and social payoffs from investing in human development. The analysis revolves around scenarios of public spending that allow four developing countries to meet targets of the Millennium Development Goals (MDGs). Public spending rises...

This paper employs a multi-industry general equilibrium model of oligopolistic competition, free market entry and trade in which capital is used to establish firms and labor is used for production. We show that both absolute and relative endowments matter for the pattern of trade. We demonstrate...

We show that the set of competitive equilibrium points of a pure exchange economy are the equilibrium points of a broader class of better-response demands than the usual utility-maximizing demand functions. The better-response demands are derived from assigning weights to all commodity bundles...

We develop a unifying framework for optimal income taxation in multi-activity economies with general production technologies. Agents are characterized by an N-dimensional skill vector that captures intrinsic abilities in N activities. The private return to each activity depends on individual...

We analyze the role of optimal income taxation across different local labor markets. Should labor in large cities be taxed differently than in small cities? We find that a planner who needs to raise revenue and is constrained by free mobility of labor across cities does not choose equal taxes...

We build a general equilibrium model with endogenous borrowing constraints compatible with credit segmentation. There are personalized trading restrictions connecting prices with both portfolio constraints and consumption possibilities, a setting which has not thoroughly been addressed by the...

To determine the full effects of taxation on income distribution, policymakers need to consider the impacts of tax evasion. In the standard analysis of tax evasion, all the benefits are assumed to accrue to tax evaders. But tax evasion has other impacts that determine its true effects. As...